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Mintel: carbonated soft drinks in Australia declining

ingredientsnetwork 2017-12-18
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The carbonated soft drink (CSD) sector in Australia is facing continued pressure amid consumer concerns about sugar. New research from global market intelligence agency Mintel reveals that total volume sales of Australia’s CSD category are expected to see a 2.3% decline in 2017. In fact, CSD sales dipped 4.7% in 2016 since 2014.

 

Mintel research indicates that negative sentiments towards sugar have driven many Australians to reconsider their sugar intake. One in three (34%) metro Australian consumers

 

say that they are limiting the amount of sugar/sugar substitutes in their diets, while three in 10 (29%) are avoiding items with sweeteners. Furthermore, as many as three in five (58%) Australians say they are limiting their consumption of sugar and sugar substitutes in an effort to watch their weight, while over half (53%) do so because of future health concerns (e.g. developing diabetes).

 

Jenny Zegler, Global Food & Drink Analyst at Mintel, said: “With concerns about obesity rates and overall health in Australia, many consumers are now focusing on sugar and sweetener content when choosing food and drink, with some limiting the amount of sugar or sweeteners in their diets. These concerns have especially taken a toll on Australia’s carbonated soft drinks category, which is forecast to see further sales declines by the end of 2017. Carbonated soft drink companies that seek to reconnect with consumers must take into account that concerns about sugar and sweeteners will continue to be a focal point for consumers moving forward.”

 

Indeed, it seems there is close scrutiny on the sugar content found in CSDs among Australian consumers; over a third of (35%) metro Australians say that they check for the level of sugar/sweetener content in CSDs and 30% check for the types of sugar/sweeteners.

 

While personal preferences for or against sugar or specific sweeteners may vary by the individual, it appears that many Australians have a desire for more clarity around sugar content. More than three in five (64%) metro Australians say they feel cheated when a company is not clear about the high sugar content of its products. What’s more, as many as three in four (76%) agree that food and drink companies should make it easier to understand how much sugar is in their products.

 

Shelley McMillan, Trend & Innovation Consultant, ANZ, at Mintel said: “Our research points to the necessity for simple and direct communication to reassure Australian consumers who are wary of their sugar consumption. To avoid consumer confusion or concern, products could define the amount and type of sugar or sweeteners on product labelling to ensure that consumers can easily understand the sugar content of food and drink. Currently, the provision of front-of-pack sugar descriptions by carbonated soft drink companies are few and far between. This challenges more companies to be transparent in their claims.”

 

Meanwhile, even though consumers are looking for reduced sugar products, innovation activity does not necessarily align with interest. According to Mintel Global New Products Database (GNPD), ‘low/no/reduced sugar’ is a claim carried by just 12% of CSD product launches in Australia in the two years to October 2017. This is just below the already low global average of 15% of CSD introductions launched globally in the same time period.

 

Finally, Mintel research shows that consumers think that manufacturers could be more aggressive in creating reduced-sugar formulations, with three in four (74%) metro Australians agreeing that food and drink companies should be doing more to reduce the amount of sugar in their products.

 

“Though there is a demand for reduced sugar food and drink products, companies are not doing enough when it comes to new product development. In fact, our research indicates that there is a definite opportunity for players in the carbonated soft drink industry to introduce more low, no or reduced sugar offerings into the Australian market. Another key way of enticing consumers to stay engaged with the category is for CSD brands to consider developing low, no or reduced sugar limited edition flavour offerings,” Zegler concluded.

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